2012 2015 Triennium Work Report - IGU

1 Small Scale LNG 1 1 2012 2015 Triennium work Report June 2015 Small Scale LNG Program Committee D3 Produced by: International Gas Union International Gas Union 2014 Small Scale LNG 2 Table of Contents 1 Executive Summary .. 6 2 Introduction .. 8 3 Definition .. 10 Value Network Small Scale LNG Wholesale .. 10 Scope .. 11 4 Drivers and Business Models .. 12 Drivers, Enablers and 12 Key Drivers .. 12 Key Enablers .. 13 Key Challenges .. 14 Business Models and Scenarios .. 15 Business Models .. 15 Business Scenarios .. 15 Small Scale LNG Transportation .. 17 Small Scale LNG Consumption .. 19 China Case .. 20 5 Parties involved in the Small Scale LNG market .. 22 Overview of the Value Chain .. 22 Interactions in the Value Network .. 24 6 Technology .. 26 Production .. 26 Layout .. 26 Treatment .. 27 Liquefaction .. 28 Main Equipment (incl. Manufacturers) .. 32 Utilities .. 33 Production Cost.

2 34 Storage and Boil Off Gas .. 35 Storage Tank Types .. 35 BOG management .. 40 LNG 41 Shipping .. 43 SSLNG Shipping Characteristics .. 43 Safety Developments in SSLNG Shipping .. 45 Shipping Cost .. 46 Small Regasification and Import Terminals .. 47 International Gas Union 2014 Small Scale LNG 3 Specific features of a small regasification/import terminal .. 47 BOG options .. 47 Logistics .. 49 Logistic analysis and distribution methods .. 49 Logistic SSLNG characteristics .. 50 Challenges for Small Scale LNG logistics .. 51 7 Safety, Standards and Regulations .. 52 Safety .. 52 Technical standards .. 53 Regulations .. 54 Regional overview of Standards and Regulations .. 54 Asia .. 54 Russia .. 56 Europe .. 56 South America .. 60 North America .. 61 Recommendations on Safety, Standards and Regulations .. 63 8 Outlook and Conclusions .. 64 Appendix A. Contributors .. 66 Appendix B. Abbreviations.

3 67 Appendix C. Bibliography .. 69 Appendix D. Industry Standards & Regulations .. 70 Appendix E. Small Scale LNG parties .. 73 Appendix F. Liquefaction processes .. 74 Appendix G. Small Scale LNG fleet, current and orderbook .. 77 Appendix H. Examples of Modified Terminals .. 79 Appendix I. Examples of Small Scale Terminals, Operating and Planned .. 80 Appendix J. Examples of Small Scale Liquefiers, Operating and Planned .. 81 This publication is produced under the auspices of the International Gas Union (IGU) which holds the copyright. This publication may not be reproduced in whole or in part without the written permission of the IGU. However, irrespective of the above, established journals or periodicals shall be permitted to reproduce this publication, or part of it, abbreviated or edited form, provided that credit is given to IGU. This document contains strictly technical information to be distributed during the 26th World Gas Conference in Paris, France, and has no commercial intent.

4 The information contained in this material is intended to be general in nature and must not be relied on as specific advice in connection with any decisions you may make. The authors and IGU members are not liable for any action you may take as a result of you relying on such material or for any loss or damage suffered by you as a result of you taking this action. No warranty is given to any person, in particular unauthorised persons having possession of this Report , as to its accuracy of the data or the effect of the Report on the legal liability or rights of parties involved in the making of this Report or participating in the industry. Any recommendation that any procedure be changed is not to be taken that to imply that any existing procedure is defective or inadequate in any way. International Gas Union 2014 Small Scale LNG 4 Table of Figures Figure cover: Tekna Norway web site (public domain) Figure 1 Small-Scale Liquefaction and Regasification Capacity, 2014.

5 Source: IHS (edited version) .. 8 Figure 2 Small Scale LNG Value Network, Wholesale and Retail. Source: Shell (edited version).. 9 Figure 3 Five different logistic LNG distribution methods in Small Scale LNG Wholesale . Source: Shell (edited version).. 10 Figure 4 Example of SSLNG value chain cost. Partly sourced from: PlumEnergy May 2013- public domain.. 12 Figure 5 Regional Main drivers for SSLNG. Environmental is global. Source: Shell (edited version).. 13 Figure 6 Existing and possible future Emission Control Areas. Source: DNV-Greener Shipping in North America.. 17 Figure 7 Pioneer Knutsen ( LNG m3). Source: Gasnor AS (Shell) .. 18 Figure 8 Chinese liquefaction plant owners in 2014. Source: Shell (edited version).. 21 Figure 9 Configurations of the Small Scale LNG value chain. Source: Shell (edited version).. 22 Figure 10 Small scale liquefaction plant and transportation by small ships/truck/rail to small scale terminals/ regas. Source: Vopak.

6 24 Figure 11 Small scale liquefaction plant and transportation by small ships/truck/rail to small scale terminals/ regasification. Source: Vopak.. 25 Figure 12 Typical SSLNG LNG plant simple block scheme. Source: Kogas.. 27 Figure 13 The 440ktpa LNG plant at Guanghui, China. LIMUM - CWHE Process with integrated N2-Removal. Source: Linde Engineering.. 29 Figure 14 2000m3 horizontal tanks in Jaen, Spain. Source: HAM Enagas.. 37 Figure 15 Horizontal and vertical pressurized tanks at M sjoen (5000m3) and Titania (250m3), Norway. Source: Gasnor AS (Shell).. 37 Figure 16 LNG Plant, Kwinana, Australia. 61ktpa with Spherical Storage. Source: Linde Engineering.. 38 Figure 17 On the left a FC atmospheric steel tank, built by Linde (AGA). Source: Gasnor AS (Shell). On the right a FC tank by AGA, Linde in Norway. Source: Linde Engineering.. 39 Figure 18 Atmospheric Non-cylindrical tanks (Prototype). Source: Bunkering Solution GTT France (public domain).

7 39 Figure 19 Small scale pressurized tank LNG ships (1100m3 Pioneer Knutsen & 7500mr Coral Methane), Source: Shell, Knutsen and Anthony Veder.. 44 Figure 20 Small Scale Vessel Coral Methane and Artic Princess conventional LNG carrier at Gate Terminal. Source: GATE Terminal, Rotterdam via Vopak.. 45 Figure 21 Typical conventional regasification/import terminal. Source: Total, France.. 48 Figure 22 Typical small scale regasification/import terminal. Source: Total, 48 Figure 23 Elements within the logistic supply chain.. 49 International Gas Union 2014 Small Scale LNG 5 Table of Tables Table 1 LNG Small Scale Wholesale covered by this Report .. 11 Table 2 Main SSLNG liquefaction technologies, processes and suppliers. Source: Shell.. 29 Table 3 Typical SSLNG liquefaction schemes in operation. Source: Kogas.. 31 Table 4 Cryogenic Heat Exchangers. Source: Shell.. 32 Table 5 Compressors types for small scale applications. Source: Shell.. 32 Table 6 Compressor Drivers Options for SSLNG applications.

8 Source: Shell.. 33 Table 7 Overview of typical SSLNG storage type tanks. Source: Total.. 35 Table 8 Boil-off-Gas mitigation methods in SSLNG.. 41 Table 9 Manifold Recommendations for Liquefied Gas Carriers. Source: SIGTTO .. 44 Table 10 Typical investment cost for LNG carriers. Crew and harbour cost source: Shell historic STS 46 Table 11 Differences between the conventional LNG and SSLNG logistic elements within supply chain.. 49 Table 12 Typical radius of offshore and onshore SSLNG transport.. 50 Table 13 Differences between conventional LNG and SSLNG shipping.. 50 Table 14 An overview of current and orderbook of LNG ships. Source: Clarksons.. 51 International Gas Union 2014 Small Scale LNG 6 1 Executive Summary Fifty years ago, the first commercial LNG cargo was shipped from an LNG export facility in Algeria in 1964. Since then, LNG has grown into a truly global commodity. This growth has been accompanied with, and driven by, economies of scale in the design and construction of facilities.

9 Since the first trains in Algeria of mtpa LNG, the conventional LNG business has evolved into mtpa mega-trains in the 77 mtpa Ras Laffan Industrial City in Qatar In recent years, a comeback of smaller scale LNG facilities has emerged. New liquefaction and distribution facilities are being constructed and operated across the globe. Currently, the global small-scale LNG (SSLNG) installed production capacity is of 20 mtpa spread around more than hundred SSLNG facilities. This is on top of the installed capacity for conventional LNG plants of approximately 300 mtpa. The SSLNG market is developing rapidly, especially as a transportation fuel and to serve end users in remote areas or not connected to the main pipeline infrastructure. This Report , written by the IGU Program Committee (PGC) D3, provides an overview of this new and dynamic SSLNG business worldwide. Its objective is to increase awareness and understanding in this area as a basis for an informed discussion on how to further develop this industry.

10 In terms of scope, this study considers the wholesale SSLNG supply chain, including production, liquefaction, transport, reception, break-bulk and regasification. The IGU defines small scale liquefaction and regasification facilities as plants with a capacity of less than 1 mtpa. In turn, SSLNG carriers are defined as vessels with a LNG storage capacity of less than 30,000 cubic metres. The retail LNG business is described in the Program Committee (PGC) D2 Report on LNG as fuel, which covers the more user-oriented supply chain, including distribution and end-use. The global commoditisation of LNG has provided a solid base for the emergence of new LNG applications and markets. The key drivers for SSLNG are environmental, economic and geopolitical. The environmental benefits of LNG in terms of CO2, SOx, NOx and particulate emissions are undisputed when compared to alternative fossil fuels but it also needs to have a transparent and profitable business model to be feasible.